Co-owning a business with my minor child

[Ronthelibrarian]

Hello,

My daughter has a small LLC that I had to be named part owner of in the state of Washington, as she is under 18.

She did all of the work - creation, marketing, sales, accounting, etc.  I did nothing but get her the business license, and our agreement is that I am a 5% owner of the business (which will change to 0% mid-year when she turns 18) solely because of her age.

My wife and I are filing married jointly.  We are both employed.  I also did some consulting work as an independent contractor.  I bought the TurboTax Home and Business software.

Questions:

1.  Did I buy the right software? If not, what else do I need?

2.  What else do I need to know about filing?  (Does one need to be done before the other or at the same time? Are they separate returns, etc.?)

3.  If my daughter also worked for someone else last year, how does having the LLC affect her personal return?

Thanks,

[Vanessa A]

Because you have an LLC partnership, even though you only own 5% of the partnership, you will actually need to use TurboTax Business to file the LLC return.  This will then generate a K-1 for each of you that will then be entered on to each of your individual returns.  To enter the K-1's, home and business will cover  you. And you can e-file up to 5 returns with one purchase which means it will cover both you and your daughter.

The LLC filing will need to be done before you can file your personal returns.

Your consulting business will go in TurboTax Home and Business, as an independent contractor, along with your W-2 wages (and the K-1 from the LLC) same with your daughter.  Her wages from work and the K-1 will go onto her personal return as well. 

No, having the LLC does not affect her wages, all the income will be reported on one tax return.